Gibraltar Financial Services Commission (GFSC) – 100% Asleep at the Regulatory Wheel

Faith in Regulations

Insolvency & Law (I&L) recently received confirmation from the Gibraltar Financial Services Commission (GFSC) that Castle Trust and Management Services Limited (CTMS) was formally approved to carry out regulated activities under the Financial Services Act 2019.

GFSC have confirmed to Insolvency & Law (I&L) that: “Castle Trust and Management Services Limited (“CTMS”) was approved by the GFSC to provide regulated activities under the Financial Services Act 2019.  One of these regulated activities was acting as a professional trustee”.  Furthermore, GFSC confirmed that “As a firm holding Professional Trustee and Pension Scheme Operator permissions, CTMS is required by [law] to hold professional indemnity insurance under Regulation 45 Financial Services (Fiduciary Services) Regulations 2020 and Regulation 5 (Personal Pensions) Regulations 2020 respectively”.

Under normal circumstances, these assurances should have brought peace of mind to potential investors. When investing in Loan Notes (LNs) backed by trustee services provided by CTMS, they would have likely felt reassured by these statements, believing their funds were being overseen by a regulated and compliant entity. Similarly, those who had transferred their pensions to CTMS would have undoubtedly placed their trust in the fact that CTMS was operating under a regulated framework.

Confetti – Deceptive Practices Unfold

However, the reality is far from what those reassurances would have led people to believe. CTMS was, in fact, issuing security trust deeds with reckless abandon—like confetti scattered at a party—to retail investors who had no idea what they were stepping into. These deeds were issued for a range of companies, often without sufficient charges being placed on the company assets to properly cover the value of the loan notes being purchased. This left people dangerously exposed without their knowledge.

Many pension holders were also lured into transferring their pensions to CTMS, only to discover, often too late, that their funds were being invested in highly illiquid and risky schemes. These schemes offered no real security, and in many cases, resulted in the complete and total loss of the pension funds. Pension holders who were counting on these investments for their future were left devastated, with their life savings wiped out. This disaster unfolded while CTMS operated as a regulated entity under the supposed oversight of the GFSC.

The extent of the damage is staggering. Without the worthless security trust deeds issued by CTMS, retail investors alone would not have lost over £125 million in investments tied to High Street Grp Ltd (HSGL). And that’s just the tip of the iceberg. Many other trustee arrangements that CTMS was involved in have also failed, resulting in even more losses. And then, of course, there’s the pensions—entire pensions that were obliterated, leaving pensioners with nothing to show for years of hard-earned savings.

A Glimmer of Hope – Potential Cause of Action

Insolvency & Law (I&L) has recently uncovered a potential cause of action that could lead to a pathway for recovery of some of these enormous losses. There is evidence to suggest that during a particular window of time, between 31st July 2019 and 14th September 2019, there may have been significant defects in the security or pension transfer processes. If your loan note security or pension transfer took place during this critical period, there could be a path to recover the funds you’ve lost.

We have identified a well-funded party who bears ultimate responsibility for the losses incurred during this period. Therefore, if you purchased loan notes or transferred your pension during the window of 31st July to 14th September 2019, we strongly urge you to contact us immediately at investigations@insolvencyandlaw.co.uk.

What’s crucial to understand is that this isn’t limited to High Street Grp Ltd (HSGL) loan note holders. Any loan note holder whose issuer has since entered into a statutory insolvency procedure, such as administration or liquidation, could be eligible. Likewise, any pension transfer that took place during the specified period may also qualify.

Don’t Miss Out

It’s also important to note that this particular call to action is entirely separate from the ongoing Third-Party Action that Insolvency & Law is pursuing against CTMS on behalf of High Street Grp Ltd Loan Note Holders (HSGL LNHs). However, if you are an HSGL LNH and your loan note was issued during this critical period, please make us aware as soon as possible. There may be additional avenues for recovery that apply specifically to your case.

Please don’t delay in reaching out. Time is of the essence when it comes to these kinds of claims. Contact us today at investigations@insolvencyandlaw.co.uk, and let us help you take the next steps towards potentially recovering your lost funds or pensions.